New York-based brand management company Sequential Brands Group, Inc. announced a 20.7% decrease in first-quarter revenues from continuing operations on Friday, a decline which resulted in a significant widening of the group’s total net loss.
For the first quarter ended March 31, 2020, the company’s revenue from continuing operations came to $20.2 million, down from $25.5 million in the prior-year period, as the Covid-19 pandemic forced many of the retailers that carry the group’s products to close.
The company, which owns the Jessica Simpson, Gaiam, Avia, and William Rast brands, among others, and also works with a range of licensees, reported a quarterly net loss from continuing operations of $85.3 million, or $1.30 per diluted share, compared to a loss of $4.8 million, or $0.07 per diluted share, in the same period in the previous year.
“While the coronavirus pandemic has significantly impacted the U.S. economy and the apparel and accessories industry, we plan to weather the storm by remaining laser-focused on managing cash in-flows, instituting further expense reductions, and negotiating short-term lender relief,” commented Sequential Brands Group CEO David Conn in a release, highlighting efforts being made by the company to maintain liquidity during and after the health crisis.
Measures being implemented by Sequential Brands Group to counteract the negative effects of the pandemic include the implementation of temporary salary cuts across the company and the reduction of operating expenses through decreasing marketing costs and deferring non-essential spending.
As of May 15, the group has also negotiated increased flexibility with its lender base and made net revolver borrowings of $14.1 million, excluding lender fees.
Sequential Brands Group did not provide guidance for the second quarter or the full fiscal year 2020.